THE TRUMP ECONOMY for Some New York Industries 2017 Will Be Huge
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CRAINSNEW YORK BUSINESS Health care ‘Genius Bar’ P. 6 | Halal Guys’ secret sauce P. 8 | Bronx factory’s broken promise P. 9 NEW YORK BUSINESS®®®® DECEMBER 12 - 18, 2016 | PRICE $3.00 THE TRUMP ECONOMY For some New York industries 2017 will be huge. For others, a total disaster Page 13 VOL. XXXII, NO. 50 WWW.CRAINSNEWYORK.COM NEWSPAPER P001_CN_20161212.indd 1 12/9/16 8:36 PM WE HEAR YOU, MARIO. With Express Funding, get your card payments in your Chase checking account the next business day. Chase.com/ExpressFunding All businesses are subject to credit approval. Next business day funding is available to eligible Chase merchant services clients who deposit into a single Chase business checking account. Visa®, MasterCard® and Discover® credit and debit transactions are eligible. Additional terms, conditions and restrictions apply. Merchant services are provided by Paymentech, LLC (“Chase”), a subsidiary of JPMorgan Chase Bank, N.A. Real business owners compensated for use of their actual statements. Deposit products offered by JPMorgan Chase Bank, N.A. Member FDIC ©2016 JPMorgan Chase & Co. Untitled-11 1 8/30/2016 12:13:11 PM DECEMBER 12 - 18, 2016 CRAINSNEW YORK BUSINESS FROM THE NEWSROOM | ERIK ENGQUIST | ASSISTANT MANAGING EDITOR IN THIS ISSUE 4 AGENDA Uber could Bag it, Chuck take business 5 IN CASE YOU MISSED IT from contrac- THERE’S AN OLD SAYING in political circles that the most dan- tors serving 6 REAL ESTATE disabled gerous place to be is between Sen. Charles Schumer and a New Yorkers camera. The truth is, most elected officials would like to be 7 SMALL BUSINESS the butt of that joke—they’re just not as good at getting air- 8 RESTAURANTS time. Chuck has a knack for finding topics that, even if they 9 MANUFACTURING are not exactly weighty, strike a chord with folks who still FEATURES watch the local news. The subjects of Schumer’s famous Sunday morning press 13 ECONOMIC OUTLOOK conferences are typically consumer-oriented and nonparti- san, to resonate with the maximum number of voters. His weekly outrage might be shady telemarketers calling your Airline fees are a mobile phone even though your number is on the Do Schumer target Not Call list (which Chuck championed, of course). Or “ thieves in Eastern Europe stealing your personal infor- because no one likes mation because some agency or business fails to secure it. fees—or airlines, for Recent targets of the senator have included Lyme disease P. 21 AUDRA FORDIN and ticket scalpers who use bots. that matter. But this Usually, the senator is right. But not always. Some- time, he’s wrong 21 GOTHAM GIGS times his captivation by cameras gets in the way of com- 22 SNAPS mon sense. To wit: airline fees. Airline fees are a Schumer special because no one likes fees—or airlines, for that 23 PHOTO FINISH matter. Any time a new charge is introduced, the senator cranks up his publicity CORRECTIONS machine to take advantage of that Sunday-morning void in TV reporters’ weekend Nikeia Marks’ employer is Big Brothers Big Sisters shifts. He objected to fees for checked luggage, although they offset the cost imposed of New York City. The organization was incorrectly on carriers and have helped end the rash of airline bankruptcies. Schumer’s latest named in “Giving Back,” published Dec. 5. gripe: higher ticket prices for passengers who put carry-ons in the overhead bins. This time, Chuck is wrong—for the same reason people are wrong to reject tolls on the East River bridges. Pricing is the best way to allocate a finite resource. It’s why flights during Christmas week are expensive but available if you want one. Since airlines began charging for checked luggage, passengers have been stuffing the overhead bins to capacity. Boarding planes has become a competitive sport, with the losers left literally holding the bag and feeling like the kid without a chair when the music stops. Discounting tickets for passengers without carry-ons will inspire a few custom- ers to travel light or pay a bit more to check their bags. It will make boarding faster and more civil. Then we can all sit back, relax and have a nice flight. As for Schumer, my longtime Brooklyn neighbor, I’ll forgive him for decrying ON THE COVER the carry-on fees if he’ll expose one airline trick that I increasingly suspect is no CRAIN’S COMPOSITE: myth: The price of a ticket rises when you search repeatedly for it from the same SUZIN KOEHLER computer. That’s not behavioral economics. That’s just cruel. DIGITAL DISPATCHES CONFERENCE CALLOUT JANUARY 24 Go to CrainsNewYork.com CRAIN’S READ The Sutton Place BREAKFAST FORUM developer who turned Join Crain’s and New York City’s down $45 million in > FIVE BOROUGH PRESIDENTS, profits now stands to including the Bronx’s Ruben Diaz Jr., lose $4.3 million in bankruptcy auction. for a moderated discussion on each leader’s n The acting head of the priorities and the challenges Centers for Medicare and facing the city’s neighborhoods Medicaid Services criticized the idea of in the year ahead. administering Medicaid through block NEW YORK grants to states, one of Donald Trump’s ATHLETIC CLUB health care proposals. 8 a.m. to 9:30 a.m. n Nine years after its launch, the city is over- [email protected] hauling its Taxi TV program by greenlighting three tablet-based entertainment systems. Vol. XXXII, No. 50, December 12, 2016—Crain’s New York Business (ISSN 8756-789X) is published weekly, except for n NBC News is shutting down the digital double issues the weeks of June 27, July 11, July 25, Aug. 8, Aug. 22 and Dec. 19, by Crain Communications Inc., 685 Third Ave., New York, NY 10017. Periodicals postage paid at New York, NY, and additional mailing offices. Postmaster: Send news service it launched in 2009. address changes to: Crain’s New York Business, Circulation Department, 1155 Gratiot Ave., Detroit, MI 48207-2912. For subscriber service: Call (877) 824-9379. Fax (313) 446-6777. $3.00 a copy, $99.95 one year, $179.95 two years. (GST No. 13676-0444-RT) ©Entire contents copyright 2016 by Crain Communications Inc. All rights reserved. BUCK ENNIS DECEMBER 12, 2016 | CRAIN’S NEW YORK BUSINESS | 3 P003_CN_20161212.indd 3 12/9/16 9:15 PM WHAT’S NEW DECEMBER 12, 2016 AGENDAA welcome effort to end the plague of scaffolding ne of the most maddening inconsistencies of city gov- ernment is that if one window jamb on your building is a quarter-inch out of place, the Landmarks Preservation Com- mission comes down on you like a ton of bricks for wrecking Othe aesthetics of the neighborhood. But if an actual ton of bricks is about to fall, you need not repair it. Instead, you can erect a sidewalk shed to protect FINE IDEA: A City Council passersby, and keep it there for months, years, or even decades. bill would impose We’re exaggerating, slightly, about Landmarks, but not about sidewalk penalties if sheds lingering for ages. is really happens, and—as New Yorkers know work above sidewalk all too well—not infrequently. A plague of these hideous structures has sheds stalls. a icted the city, squeezing sidewalks and dooming businesses to darkness. e sheds are more than just an inconvenience and an assault on our eyes; they drive away customers from restaurants, retailers and other com- the answer, but at least Kallos is asking the right question: How can the mercial establishments, as reporter Aaron Elstein documented in a Crain’s city ensure that sheds are not in place any longer than necessary? His leg- cover story earlier this year. e loss of revenue costs employees their jobs islation would impose nes if seven days go by without work being done, and sometimes entrepreneurs their dreams. with exceptions for extreme weather, delays in city permitting, emergen- Elected o cials have elded countless complaints from constit- cies and other factors. A week is absurdly short for a problem measured in uents about sheds and sca olding but years, and enforcement would be challeng- have made virtually no progress toward Hideous structures linger for years, ing. e bill relies on the notoriously ine - solving the problem. In their defense, cient Department of Buildings, whose own it’s complicated. No one dares say that plunging sidewalks and storefronts headquarters has been clad in sca olding some sheds are not needed. e law re- into darkness for a good while. Kallos envisions the city quiring them arose from a tragedy that repairing buildings itself and billing their le a woman dead from a fallen piece of recalcitrant owners, which may be wishful terra-cotta. But compelling building owners to x their faades when they thinking. A legislative x would catch bad actors trying to game the sys- don’t have the money to do so is not easy. And if it is far cheaper to erect tem while giving property owners intent on rehabbing their faades a rea- shedding and leave it, some will do that. sonable amount of time to do so. We give Kallos credit for starting a con- is month, City Councilman Ben Kallos, D-Manhattan, introduced a versation—one that city government and the real estate industry should bill to end this insanity. It needs a thorough vetting before it can be deemed have had long ago. — THE EDITORS FINE PRINT Former Goldman Sachs President Gary Cohn emerged as Donald Trump’s leading pick to head the National Economic Council, making him the third Goldman Sachs alum to be considered for a top post.